Scary Financial Statistics You Should Know (And Learn From)

Financial literacy is the ability and knowledge to make informed and effective financial decisions.  It is a challenge for many people to manage their resources to have a financially secure life.

Updated Financial Statistics In Eight Key Areas

1.  Saving For An Ample Emergency Fund To combat these pressures, an ample emergency fund is a “must-have” tool for households. How much should it be? It is common to believe six months of savings to pay for living expenses is a good start.  During financial crises and when unemployment rises, people may need more protection.

2. Spending Less Than You Earn To be financially comfortable, you need to spend less than you earn, not borrow to pay your debt.

3. Retirement Savings The lowest pre-retirement income quartile would need to defer retirement to age 85 before 90% of households have a 50% probability of success. (Employee Benefit Research Institute)

4. Net Worth The net worth varies for families by income, age, race, and asset and liability composition. Having a higher income affords families financial flexibility to have better assets, notably retirement savings, investment accounts, owning a home, net of a mortgage liability.

5. Consumer Debt When buying a home, longer mortgages of 30 years remain more common than 15-year loans. The buyer should not ignore the substantially higher interest you are paying for the purchase of the home.

6. Credit reports and Credit Scores It is essential to review your credit report at least annually. According to a new Consumer Report, 34% of Americans found at least one error on their credit report.

7. Investing As A Means To Wealth Investing early, even in small amounts, will be beneficial for you in the long term. Yet, many people remain on the sidelines.

Taking one step at a time, we can strengthen our financial discipline by saving more, spending less, participating in retirement plans at work or on our own, investing more, and having an estate plan. Most importantly, you should have a financial plan to help you achieve your financial goals.

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